Microsoft fined $731m by European Commission over web browser choice
bbc.co.uk
bbc.co.uk
It's very simple: citizens go to jail, companies can't; so we have to make them pay, a lot. When fines are a fixed amount, the corporations have to simply earn more by committing the crime than they would have to pay if caught; banks are very adept at playing this game.
If a someone in a corporation is actually committing a crime , then, yes they can go to jail.
If they have committed some kind of civil offense or if it's a criminal offense with no jail term attached then they don't go to jail. There's nothing special about corporations that prevent the people in charge from serving jail time.
Decisions -- where they are rational -- become a cost/benefit analysis. If you really want to deter the behavior, the costs have to outweigh the benefits. (Perhaps significantly enough to outweigh various arguments about what the true costs and benefits might be.)
And... this still says nothing about the damage that may have been caused to victims, and compensation for same. (For example, take someone's health away in certain fashions, and no amount of money can replace it.)
http://www.nasdaq.com/article/apple-raises-market-share-to-5...
The highly competitive marketplace for mobile devices gives you as a consumer a wide variety of choices of operating system, and each operating system (apart iOS) is adjusted by the operator to best fit their idea of market
You can choose devices, you can choose different versions and setups of android. There is a competive market
The fact that its not free as in speech is not the problem (it should be but)
Not even close. It's in a majority position but nowhere near a monopoly.
Although it can probably be considered to be a "dominant position", but then come the next part:
1. Has somebody complained
2. Is "Android" using its dominant position to distort the market
There's nothing wrong with having a monopoly. What is, however, illegal is to abuse your monopoly to keep and extend your monopoly to other domains.
Btw Google / Android isn't near anywhere a monopoly in the smartphone / tablet market.
What would be illegal would be, for example, Google using its search engine to eliminate any mention of the word "Apple" and of the "apple.com" domain or, worse, only allowing access to negative criticism of Apple products. But they aren't doing that (at least not that we know of).
On the contrary MS has been officially judged has being a monopolist abusing its power to try to keep and extend its monopoly. Both in an US judgement and in an European judgement.
Heck, even selling the Xbox at a loss for years and years while living on monopoly money is a dubious way to enter a market (but personally I wouldn't mind if MS faded into irrelevancy and had only its Xbox division doing fine ; )
Why? Because IE was a default browser, all the OS have a default browser. Microsoft didn't prohibited anybody from installing another browser.
If we consider that a monopoly and something punishable, then Android + Chrome is another monopoly. In EU, Android has over 61% market share [1]. And every Android comes with its default browser. And as your parent said, I don't see any ballot screen telling me to choose an alternative browser, but Google doesn't keep you from installing other browsers. Is the exact same situation.
[1] http://www.nasdaq.com/article/apple-raises-market-share-to-5...
Android is — at best — in a dominant position, but Android also isn't a monolithic entity.
Then comes the second problem: ignoring the non-monolithic nature of Android where e.g. Samsung and HTC — while all using the same base system — compete with one another) being a natural monopoly (or even in a dominant position) is not illegal, abusing such a position to distort other markets is.
If you are an EU citizen and can make such a case, you should feel free to bring it up to EU competition courts. But you have to make the case first.
> At the same time, Compaq removed the Internet Explorer icon from the desktop of its Presarios and replaced it with a single icon [for Navigator]
>When Microsoft learned of Compaq's plans for the Presario, it informed Compaq that it considered the removal of the MSN and Internet Explorer icons to be a violation of the OPK process by which Compaq had previously agreed to abide. [...] Finally, after months of unsuccessful importunity, Microsoft sent Compaq a letter on May 31, 1996, stating its intention to terminate Compaq's license for Windows 95 if Compaq did not restore the MSN and Internet Explorer icons to their original positions. Compaq's executives opined that their firm could not continue in business for long without a license for Windows, so in June Compaq restored the MSN and IE icons to the Presario desktop.
Microsoft was fined around 1 percent of their global sales for a violation of the terms of a kind of a settlement in an old competition case (antitrust case). Microsoft already knew that if they violated the terms they would be fined up to 10 percent of their global revenues: http://europa.eu/rapid/press-release_IP-09-1941_en.htm?local...
Microsoft mostly complied with the terms of the settlement, but not entirely as the OP describes. In that light the 1 percent fine is probably not way off.
Consider an analogy: let's say there's a power company who runs a monopoly on generating electricity. They also provide natural gas services to their customers. There is, however, a bunch of other smaller natural gas companies just a phone call away that people can buy natural gas from; all you have to do is call them and have a technician come and flip a switch in your home. Is it really harmful to the consumer if the power company with the dominant market position doesn't give their customers the phone numbers of the companies competing with its natural gas division? No.
And for that sin, MS will keep paying for a long time; they're basically an ATM for the EU now. This is not great but hey, they do have a history; once a felon, forever a felon, so to speak.
In any case, this is not open to debate -- both the American and European justice systems found MS guilty, so that's how it is.
We've accepted browsers are part of the OS for a long time, what's next fining Apple for not promoting Mozilla or Chrome on iOS?
There's nothing crazy about it.
> We've accepted browsers are part of the OS for a long time
We've accepted that browsers are necessary, the EU seems to have not accepted an OS natural monopoly can be leveraged into a browser monopoly. Sounds perfectly sane, and a good thing.
> what's next fining Apple for not promoting Mozilla or Chrome on iOS?
Apple does not have a monopoly marketshare, which lead to the original decision which Microsoft then broke: http://en.wikipedia.org/wiki/European_Union_Microsoft_compet...
No. Apple never had a super-majority (or even a majority) of the smartphone marketshare, let alone in the EU where Symbian and BB historically held strong marketshares during iOS's tenure.
iOS's best has been 30~40% in some european country (not even EU-wide). Although it does capture the vast majority of profits, but that's not really relevant to antitrust-type cases.
I believe Samsung currently has a bigger share of the EU market than iOS. There never was a case of monopolistic abuse from apple in the EU, because they never came close to a monopoly.
Why not do the same thing with AV, audio players, text editors, file browsers, CD/DVD burners, etc... ?
So is it in the US as well.
Where? You're making that up.
Every phone has a browser, and many did before the iPhone launched in 2007 (even if all they had were crappy WAP browsers)
Yes, they stopped offering the browser choice, but at what point did someone from EU-HQ contact MS-HQ and tell them they'll be fined if they don't put it back in? Surely it would only take a few weeks at the most to actually re-instate the "feature" once they were threatened with a huge fine.
It might have been better for Microsoft to have actually been forced to give money to the other browsers to promote their products, or alternatively, just bundle Firefox/Chrome with Windows and be done with it.
It wouldn't have been better for Microsoft. They know very well that each product they establish as a monopoly increases their chance of coming back as an all-around industry leader. Actually, I'd be willing to bet this wasn't a "technical error". I've never seen features just unexpectedly disappear out of any piece of software.
It's not like they weren't told about it first.
Do you think that makes sense?
If anything is 'anti-competitive' it's rulings like these, which punish people for producing quality software and increase the uncertainty of doing business in the EU.
There's a good comparison of the two systems over here: http://www.iie.com/publications/chapters_preview/56/10ie1664...
Abuse of a natural monopoly.
> Apple should also give that choice to their OSX users.
Stuck at 10% global marketshare (probably below that in the EU), there is no risk Apple will be able to leverage a dominant OS position they don't even remotely have into market distortions in related domains.
When they do and take actions that are detrimental to the proper functioning of a free market they will get fined as well
Microsoft is not evil, not by any normal definition of the word, but they are using power to keep power. That's normal, and that's why anti-trust laws are draconian - something is needed to equalise the odds
On the other hand, I do find it weird there are no repercussions like this for Windows' new secure boot "feature".
Because "proprietary" is irrelevant, the operative word relevant to the original judgement was "monopoly". And more precisely abuse of a natural monopoly.
> It's Microsoft own operating system and they should be allowed to incorporate whatever piece of software they'd like, albeit to a reasonable extent.
If they were sitting at a 10% desktop OS market share that would be the case. But over the last ~150 years, natural monopolies have come to be seen as too dangerous (due to their ability to leverage an essentially impregnable stronghold into dominance in other domains through "legal" market distortions) to be left to play by the normal rules, so many first-world countries have additional rules for monopolistic entities to follow.
In the EU, companies in dominant positions have "a special responsibility not to allow [their] conduct to impair competition on the common market".
Microsoft already started hiking prices for some of the enterprise products, and for now they can afford this.
1. I don't think it's useless, when companies raise their price they loose customers so Microsoft will probably be more careful next time.
2. If it is useless in practice, we should change the law but surely not let them do what they want, just because it's useless.
Yeah well, fighting IE's monopole is trying to reduce dependecy to Microsoft.
If they raise the price by €1 and for the sake of argument we assume a net profit of 50%, they would have to sell 1.1 billion packages to recoup the fine (I don't think Microsoft has sold that many software products in their lifetime, but it's a fun little thought experiment). 1.1 billion Windows 8 licences at €280 a piece is €308 billion revenue of which the corporation taxes will flow back to the EU members. It's a win-win for our tax payers!
High software prices indeed harm tax payers. There is no win-win.
High software prices generally hurt businesses more than individual taxpayers. The 1EUR fine would be a catastrophe for Microsoft's PR, however.
That kind of move would also push a non-trivial population to alternatives (however weak) like Google Docs.
To be more clear, there is noting illegal about HAVING a monopoly. It's what you do WITH a monopoly that matters. If you don't have a monopoly, you're much less restricted with what you can do.
To correct you analogy, it would be if one car company manufactured 90% of the cars and decided to sell the cars with its own tire brand.
But more importantly, problems caused by some monopolies (e.g. extortion), and monopolies themselves, have historically been the RESULT of government intervention. Other web browsers obviously can compete considering IE is not the most widely used browser anymore.
Tires are an integral part of cars, yet there is a thriving market for tires. A car manufacturer that got to Microsoft level market share and tried to shut out other tire manufacturers would face the same kind of scrutiny.
Originally, Netscape was a thriving company and able to make money by selling it's software to consumers. Microsoft crushed them by giving their interferer browser away for free with their Windows monopoly. For many years after that, consumers had a terrible browser with little to no alternatives.
Eventually, web browsers found a way to compete but consumers suffered with the artificially created IE monopoly. Innovation to slow down and even went backwards during those years.
You're looking at the world today as if it was always thriving with choices but MS inflicted many years of damage to consumers by illegally driving out competition and stifling innovation.
It's important for governments to protect competition and prevent monopoly abuse. You might argue that MS got away with killing Netscape because the fine was worth it for them but at least they were stopped from preventing more damage with their monopoly. Who knows what other businesses they would have tried to shut down.
The browser ballot is BS imposed by bureaucrats.
So when a consumer is not aware of XXX, it's Microsoft's fault?
*Substitute XXX for anything you want - alternative browsers, quantum mechanics, his own mortality, etc.
Personally, I think it's the consumer who should accept that responsibility.
Never mind that even if a browser is free, alternative browsers face substantial friction. Many users don't even understand what a browser actually is.
If they did, I'd be heading to Brussels with a pitchfork along with about 100 other people at my company.
Could a business, a corporation, go to war against another entity. Countries go to war all the time and while it may be "illegal", it's only the loser that has to suffer the consequences.
What if Microsoft just decided screw it, and flipped a magic switch somewhere and shut down the entire EU infrastructure. No OS, no web servers, no SQL, no sharepoint, etc. Trashing or stealing every bit of data along the way? Freeze Microsofts assets you say? What if they could freeze or steal a great portion of the EUs assets?
Sure, the EU would get over it eventually, but it's an interesting thought experiment.
Afghanistan looks like a useless chunk of dirt until you dig some holes.
If Microsoft did it, I'd probably laugh a bit at the irony simply because its how the EU operate.
More than likely, they'll roll out changes to their browser preferences now (that they've been caught red-handed) and maybe include a "browser bundle" that has Firefox, Chrome and IE in newer versions and recommend OEMs deploy the same. Naturally it may still default to IE if the user clicks "next". That way, they can maybe negotiate down the overall sum of the fine saying "hey, sorry we're late, but look! We're doing the changes."